Premier Sean Chen, right, tells reporters at the Executive Yuan in Taipei yesterday about the Cabinet’s plan for the minimum wage.

Photo: Wang Min-wei, Taipei Times

Premier Sean Chen (陳冲) yesterday turned down a proposal to increase the monthly minimum wage next year, leading to an announcement by Council of Labor Affairs (CLA) Minister Jennifer Wang (王如玄) that she would step down.

At a meeting of the legislature’s Social Welfare and Environmental Hygiene Committee, Wang, in tears, announced that she would resign upon learning that Chen had told a press conference in the Executive Yuan in the afternoon that the minimum wage would remain the same, although the minimum hourly wage would be raised.

“I would cordially like to have a talk with her to again express my wish that she stay on and continue her work with us,” Chen said in response to a question about Wang’s resignation.

Chen called the press conference yesterday afternoon to announce his decision on the policy, which has been hotly debated since the council presented the minimum wage increase proposal to the Cabinet. The proposal was put forward on Aug. 9 by the Minimum Wage Review Committee, a mechanism set up under the council to review the salary standard on annual basis.

Under the proposal, the minimum hourly wage rate would have been increased in two stages — from NT$103 to NT$109 next year and to NT$115 in 2014 — if all conditions allowed, while the minimum monthly wage was to be raised from NT$18,780 to NT$19,047, an increase of NT$267, or 1.42 percent.

However, business representatives opposed the proposal when they were consulted on economy-boosting strategies by the Cabinet, forcing Chen to ask ministers without portfolio Kuan Chung-ming (管中閔) and James Hsueh (薛承泰) to review the proposal.

On Monday, Kuan and Hsueh suggested that the Cabinet go ahead with the proposed increase in the hourly wage and postpone the monthly wage raise until the economy improves.

Chen decided to take the advice of Kuan and Hsueh over Wang’s after having held “thorough discussions” over the past two days.

“We agreed to the proposal that the minimum monthly wage should be raised to NT$19,047 as suggested by the council, but that it could only take effect if GDP grows by more than 3 percent for two quarters in a row or the unemployment rate drops below 4 percent for two consecutive months,” Chen said.

Chen said he was confident that the conditions could be met, but he did not set a timeframe, saying that Taiwan, an export-oriented economy, was vulnerable to changes in the global economy.

Asked to respond to criticism by labor groups, who said the government could not even afford to offer them an additional NT$8.9 per day, only sufficient to buy a tea egg, Chen said he felt “sorry” for that, adding: “I am not a cold-hearted person.”

The decision was made with “all factors considered,” Chen said.

Also present at the press conference, Kuan said the decision was good for workers. Theoretically, marginal workers suffer most from increases in the minimum wage because the resulting economic strain would lead to closures of small and medium-sized enterprises that mostly hire low-skilled workers, he said.

“It is not just a theory; I have heard of this situation actually happening,” he said.

The Democratic Progressive Party (DPP) described the decision as “shameful” and described the President Ma Ying-jeou (馬英九) administration as “chaotic.”

“It is the government’s responsibility to promote economic growth and lower unemployment rates, but now GDP growth and the unemployment rate are being used as a barometer to decide whether to raise the minimum wage,” DPP spokesperson Wang Min-sheng (王閔生) said.